What is causing the decline in health insurance stocks HUM, UNH, CI today?

Surprise Medicare Decision Sends Health Insurance Stocks Plummeting in Historic Downturn

President Joe Biden’s administration has announced that Medicare Advantage rates will not be increased for 2025, leading to a downturn in health insurance stocks on Tuesday. This decision is a surprise to the health insurance companies, as the government usually raises rates compared to initial proposals. Only once in the last decade has it not done this, and now companies will have to cover more costs, especially with rising inflation and interest rates driving up medical prices.

The impact of this news can be seen in the stock market. Humana (NYSE:HUM) stock has fallen by 13.8%, UnitedHealth (NYSE:UNH) stock has decreased by 6.1%, and Cigna (NYSE:CI) stock is down by less than 1%. Investors looking for more stock market news can stay updated on the latest stories, such as Ubisoft (OTCMKTS:UBSFY) layoffs, Canoo (NASDAQ:GOEV) expansion plans, and Gritstone Bio (NASDAQ:GRTS) stock decline.

In addition to facing increased costs, health insurance companies are also grappling with concerns about a potential merger between two major players in the industry. Talks between Humana and Aetna collapsed due to concerns about FTC intervention. However, investors should note that this news may not be enough to bring about a full recovery for health insurance stocks as they continue to face challenges in the current economic environment.

Overall, the decision not to increase Medicare Advantage rates for 2025 has sent shockwaves through the health insurance industry, leading to a downturn in health insurance stocks as companies face increased costs and other challenges in the current economic environment.

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